In the days leading up to the August 2023 presidential election in Argentina, a hundred “leading” economists from around the world, including progressive favorite Thomas Piketty, published an open letter warning that “radical right-wing economist” Javier Milei would inflict “devastation” and social chaos on his country.
However, they said it like it was a bad thing.
By the time Milei unexpectedly won the presidency, Argentina, once one of the wealthiest nations in the world, had a poverty rate of over 40% and the third-highest inflation rate in the world. After decades of Peronism, a toxic melding of fascism, socialism, and unionism, the nation bankrupted its central bank, and the peso was depreciating at warp speed. Do you think your mortgage rate is bad? Interest rates hit 118% in Argentina weeks before the election. The country was on its way to becoming another Venezuela. Milei wanted to blow it up.
After Milei’s unlikely victory, political scientist Ian Bremmer warned, “Economic collapse is coming imminently.” Felix Salmon, the chief financial correspondent at Axios, argued that Milei’s policies would plunge Argentina into “a deep recession.”
Seven months later, Argentina was out of a recession that had set in before Milei’s victory. The chainsaw-wielding economist, “el Loco” to friends, followed through on his promise of “shock therapy,” prioritizing taming inflation by cutting spending and deregulating the economy.
Almost all problems in modern Keynesian fixes are prominent features of governance in the modern West. Governments are always bragging about spending their way out of economic tribulations (tribulations they usually instigate.) If a person suggests that free-market economic policy would have been more beneficial in the long term, they are forced to rely on a counterhistory. This is one reason why lots of elites are rooting against Milei, who argues that most of the West’s economic ills lie in Keynesian economics. They want him to fail.
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As we all know, most panic-inducing cases of “austerity” are just minuscule reductions in the trajectory of spending growth. Not Milei’s plan, which entailed shutting down 13 government agencies and firing over 30,000 public workers — around 10% of the federal workforce. That is an unrivaled political revolution. Argentina’s federal budget was reduced by 30%. Even if the Department of Government Efficiency accomplished everything Elon Musk and Vivek Ramaswamy are talking about doing, they wouldn’t come close to 3%, much less 30%, in spending cuts. There has likely been no comparable austerity program in any Western economy.
By May 2024, Argentina recorded its first quarterly budget surplus since 2008. Inflation, still high, dropped from a debilitating 25% at the end of 2023 to 2.4% by the end of 2024. Per capita salary, having plunged, is now also recovering.
Milei is often branded a “right-wing populist,” “far-right outsider,” and “far-right libertarian.” The fascist Peronists, socialists, and unionists who spent decades gutting and plundering one of the wealthiest nations in the world are never assigned such ideological designations.
Sure, Milei is a populist of sorts. Melding his intellectual background with showmanship, Milei is an enemy of the ruling “caste,” or, as he calls them, “miserable rats,” “dirty asses,” or “filthy leftists” — take your pick. Milei’s pugilism makes President-elect Donald Trump sound like a dulcet-toned NPR host. While his domestic enemies are the targets of his most inventive and scathing invective, he has also called the pope a “lefty son of a bitch” and Piketty a “turd” and “a criminal disguised as an intellectual,” and so forth.
If Milei is a populist, he is a unique one who embraces abstract economic ideas that are generally political losers. He argues that the more people “are against the ropes” economically, “the more they will embrace freedom.” This, however, is rarely true. “Never let a crisis go to waste” is the modus operandi of nearly every political faction. In times of economic distress, demagoguery thrives, and citizens generally look to the state for more spending and more safety nets. Milei offered them the opposite.
This is another reason why Milei is a genuine and welcome threat to the world order. The difference between Milei and many other nationalists on the world stage is that he’s not using his position to transfer state power from left to right but rather diminishing the power of the state and cutting off the source of its control over citizens. How many world leaders have ever done that — not many, if any. However, then, a man who believes that the “state was invented by the devil, God’s system is the free market” is probably imbued with a kind of moral certitude that makes it possible.
Milei, for instance, lowered tariffs and trade barriers, popular in Argentina (as elsewhere), and offered a tax-free limit on imported goods from $1,000 to $3,000. Argentina cut social programs, privatized a slew of state-run industries, and cut taxes on businesses and investments. Legislators still wouldn’t bite on privatizing the government-run airline and oil sector, though there are significant reserves of shale oil and gas. Milei has pulled Argentina out of self-destructive international climate agreements.
Milei began deregulating the economy, trashing a slew of price controls, including Argentina’s rent-control regimes. As always, the price controls are ostensibly meant to create fairness, but the policy had the opposite effect in places such as Buenos Aires. Instead of seeing higher prices and less supply, as the Argentine opposition warned, Buenos Aires had a rental boom. The market increased supplies by over 170%, and prices dropped by around 40%.
Of course, one year can’t undo 80 years of economic destruction. Owing to cuts in spending by Argentina’s government, which created busywork propped up by the weak peso, the economy shrank by 3.5% in 2024. JP Morgan and the World Bank both predicted the GDP would grow around 5% next year.
Then again, there is more to life than economics. Many on the American “new Right” accuse “libertarians,” which often includes anyone who champions traditional free markets, of being amoral automatons who see everything through the prism of economic growth and GDP data. This accusation has always been predicated on a false choice. Classical liberals, such as Milei, view a free economy as a moral imperative that creates better lives for millions of people. However, Milei also sees the fight against cultural Marxism and the fight for economic freedom as inseparable.
Milei is pro-life because he said, “As a liberal, I believe in unrestricted respect for others. You can choose over your body but not over the body of the other.” One of the first things the Argentine president did was shut down government “sex education” programs, which he said were “a mechanism” of propaganda that destroys the family and “comes down from the State with the intention of promoting everything that has the line of the left and gender ideology.” Milei believes gun ownership should be a right.
The West “is in danger,” Milei told the world’s elites in Davos, because not only are modern environmentalism, radical feminism, and social justice corroding the moral foundations of the West, but they are also leading us to socialism “and, therefore, poverty.” At the General Assembly, Milei derided the United Nations and promised that Argentina would drop its longtime neutrality on international matters, backing nations in the same fight. Argentina instantly became one of Israel’s greatest supporters in that corrupt institution.
Maybe Milei’s position on social matters and foreign policy is the reason D.C. libertarians aren’t more excited about the world’s first libertarian world leader.
Reforming a nation’s economy, no less the very culture of the state, is no small task and rarely achieved without serious upheaval. What’s amazing, at least until this point, is that Milei has been able to slash state power without igniting violent social unrest, a hallmark of South American politics. Argentina is a democratic nation where trade unions, Peronists, and social progressives still hold significant political power. Recent mass protests featuring hammer-and-sickle flags and a potpourri of universalist leftist causes, including posters of Argentine mass murderer Che Guevara, paralyzed much of the country. It can all easily fall apart.
Still, Milei has an approval rating of over 50%, which is around the same number he had when he won the election. Considering the dependency and state-entrenched special interests operating in Argentina, it’s a miracle that he ever got elected.
In the 1980s, there was the “Miracle of Chile,” a term coined by economist Milton Friedman — one of Milei’s heroes. He owns an English Mastiff named after him. The liberalization of the Chilean economy, spearheaded by the Chicago Boys, a group named after the economists who studied under Friedman at Chicago University, was a success. Leftists spent decades feigning anger at Friedman for helping the fascistic Chilean junta, which overthrew a socialist government in 1973, with economic policy.
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It’s true that economic reforms were introduced undemocratically in Chile (which likely made it easier to institute). However, as is most often the case, market freedoms led to political freedoms. By 1988, a plebiscite was passed that would remove Augusto Pinochet from the “presidency.” Today, Chile is the wealthiest and freest nation in South America, while a slew of nations that fell under socialist governments are buried in miserable poverty, authoritarianism, and violence.
However, it’s wrong to call what happened in Chile a “miracle.” If Milei, who democratically overturned Peronist rule, stays in power, it will not be an Argentine “miracle,” either. The fact is that laissez-faire economics works.